Merry Christmas, Bitch!

You recall that I promised you all something special for Christmas and as you know Santa Mole never disappoints. I’m sure some of you regulars have an inkling of what I have in store for you guys but for everyone else let me start you off with a little background: Last August The Convict came to visit me here in Valencia – he was very excited to meet up for the first time but also because he just had attended a trading seminar hosted by the Van Tharp group in Berlin.

And it seems like those Krauts were up to something nefarious as he was exposed to a short term trend trading strategy by the German host of his seminar. Apparently it tested out with extremely high SQN stats – we’re talking 3.4+! That’s rather exceptional and once he returned to Australia he spent the next few months trading this very strategy by the book 12 hours each day – by hand which was very labor intensive. The rules were rather difficult to follow – sometimes even a bit subjective but it was clear that it offered a significant edge. However although being new at it Scott was rather astonished by his initial results – I recall seeing stats with returns of 10R+ per week – insane! Drawdowns were very mild and it was rare to have more than 2 consecutive losers. Suffice to say the Mole smelled blood and he wanted a piece of the action.

Now something Scott had noticed was that said strategy had some similarities with Crazy Ivan in that it was partly price pattern based. There were however significant differences in the entry preconditions required to guarantee high odds of success (and thus an SQN ranging between 3 and 4). Also it was clear that ProtectR would not suffice for this as we saw many outliers with MFEs of 4R plus. So Scott and I started to produce some specifications that would allow us to use the existing CrazyIvan codebase to implement this new strategy. Took us quite a long time but by the end of October we had something we felt was pretty close to the original system but leveraged the price based candle pattern entries of Crazy Ivan.

Now this may look like CrazyIvan but it is not – we call it (wait for it – drumrolls) Heisenberg. Why that name? Well, as I said, the SQN is pretty high – so we’re talking about a high quality product. It’s not blue but it certainly evil enough to warrant the homage to one of my favorite TV shows ever. If Walter White would have decided to hack up trading strategies instead of cooking meth then I think this would have been it. Heisenberg is a short term trending strategy – in nutshell it goes long when top pickers attempt to go short – or it sells when bottom feeders attempt to step in. As you know this is a trading approach I already use discretionarily but I never have seen a strategy with clear rules that does it so well. Usually it was one of those ‘half science – half art’ situations. Some people are really good at contrarian trades but they can never really explain to you how exactly they do it.

Well, Heisenberg does it – and it does it over and over again. We seem to enjoy it most on the 60-min and 240-min charts, so that’s what we’ll be running it on. And it appears to be working across the board – e.g. the E-Minis, the other futures (grains, metals, bonds), Forex, you name it.

And yes, in case you were wondering – it will become a subscription product. However, it’s not for everyone – you will have to be a dedicated trader as those trades can strike at any moment, even at night. Which means you can’t just attend your charts twice a day and walk away. If you miss a trade or two – not a big deal – there will be plenty of others and it won’t greatly affect your stats over the long term. On the upside – look at the chart above – that’s a 4R winner and that’s not as exceptional as you may think. Losers are always 1R or less and the win rate is about 50/50, perhaps better. So you do the math. This thing can easily produce you 20R in a month – IF you follow the alerts by the book and don’t change the system.

What else? Well, that’s pretty much the skinny of it. Oh yes – you can sign up for the beta right now – the first alerts should be coming your way before the new year once I’m done testing the messaging system a bit more. You should be set up to trade Forex, the E-Minis, and the other futures, especially the bonds (ZN, ZB). I’ll put together a pertinent page over the holidays.

Did I forget anything? Oh yes – merry Christmas, bitch! 😉

It’s not too late – learn how to consistently bank coin without news, drama, and all the misinformation. If you are interested in becoming a subscriber then don’t waste time and sign up here. The Zero indicator service also offers access to all Gold posts, so you actually get double the bang for your buck.

Cheers,